CMA Foundation · Fundamentals of Financial and Cost Accounting · Accounting Principles, Concepts and Conventions
Which of the following users of accounting information is an internal user?
The production manager is an internal user because he works within the organisation and uses accounting information for management decisions. Banks, tax authorities and prospective investors are external parties who rely on published financial statements.
- ABank considering a loan to the firm
- BProduction manager of the companyCorrect
- CIncome tax authorities
- DProspective investors
Explanation
Internal users are those within the organisation, such as owners, managers and employees. Banks, tax authorities and prospective investors are outside the firm and are external users. Hence only the production manager is internal.
Did you get it right without looking?
One question tells you little. A timed set on Accounting Principles, Concepts and Conventions shows your real accuracy, how long you take and where you lose marks.
More Accounting Principles, Concepts and Conventions questions
- Ramesh, a trader in Jaipur, buys a delivery van for his business and records it in the books at its cost instead of its current resale value…
- Mehta Traders, Surat, buys a stapler for Rs 150 for office use. The stapler will last several years, yet the accountant charges the whole Rs…
- A company's annual report includes notes on contingent liabilities, a change in depreciation method and the basis of inventory valuation, so…
- Under the accounting equation, which of the following transactions leaves total assets unchanged and total liabilities unchanged, but change…
- A firm changes its method of charging depreciation every year to show a higher profit each time. Which accounting concept or convention is v…
- Which statement correctly describes the double entry system of book-keeping as used in the accounting equation?